Reviewing Iberdrola (OTCMKTS:IBDRY) & Avista (NYSE:AVA)

Iberdrola (OTCMKTS:IBDRY) and Avista (NYSE:AVA) are both utilities companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Earnings and Valuation

This table compares Iberdrola and Avista”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Iberdrola	$51.52 billion	3.11	$7.11 billion	$4.06	23.33
Avista	$1.96 billion	1.66	$193.00 million	$2.51	15.69

Iberdrola has higher revenue and earnings than Avista. Avista is trading at a lower price-to-earnings ratio than Iberdrola, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Iberdrola and Avista’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Iberdrola	13.40%	9.88%	3.81%
Avista	10.75%	7.65%	2.50%

Volatility and Risk

Iberdrola has a beta of 0.64, indicating that its stock price is 36% less volatile than the S&P 500. Comparatively, Avista has a beta of 0.24, indicating that its stock price is 76% less volatile than the S&P 500.

Dividends

Iberdrola pays an annual dividend of $2.41 per share and has a dividend yield of 2.5%. Avista pays an annual dividend of $1.97 per share and has a dividend yield of 5.0%. Iberdrola pays out 59.4% of its earnings in the form of a dividend. Avista pays out 78.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Avista has raised its dividend for 23 consecutive years. Avista is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings and price targets for Iberdrola and Avista, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Iberdrola	1	5	2	0	2.13
Avista	0	6	1	0	2.14

Avista has a consensus target price of $39.75, suggesting a potential upside of 0.97%. Given Avista’s stronger consensus rating and higher probable upside, analysts plainly believe Avista is more favorable than Iberdrola.

Institutional and Insider Ownership

0.0% of Iberdrola shares are held by institutional investors. Comparatively, 85.2% of Avista shares are held by institutional investors. 0.8% of Avista shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Iberdrola beats Avista on 11 of the 17 factors compared between the two stocks.

About Iberdrola

Iberdrola, S.A. engages in the generation, transmission, distribution, and supply of electricity in Spain, the United Kingdom, the United States, Mexico, Brazil, Germany, France, and Australia. It generates electricity from renewable sources, such as onshore and offshore wind, hydro, photovoltaic, combined cycle gas, and conventional nuclear, as well as through batteries. The company is also involved in the purchase and sale of electricity and gas on wholesale markets; energy retail supply activities, such as gas and electricity, and other products and services, including hydrogen, as well as non-renewable generation; and production of green hydrogen. It has a total installed capacity of 62,871 MW. In addition, the company offers heat pumps, self-consumption, electric mobility, solar, etc. services to residential customers; and management of energy facilities, as well as supplies green H2, industrial heat, etc. to industrial customers. Iberdrola, S.A. was founded in 1840 and is based in Bilbao, Spain.

About Avista

Avista Corporation, together with its subsidiaries, operates as an electric and natural gas utility company. It operates in two segments, Avista Utilities and AEL&P. The Avista Utilities segment provides electric distribution and transmission, and natural gas distribution services in parts of eastern Washington and northern Idaho; and natural gas distribution services in parts of northeastern and southwestern Oregon, as well as generates electricity in Washington, Idaho, Oregon, and Montana. This segment also engages in the supply of electricity to customers in Montana; and wholesale purchase and sale of electricity and natural gas. The AEL&P segment offers electric services in Juneau, Alaska. The company generates electricity through hydroelectric, thermal, wind, and solar generation facilities. As of December 31, 2023, it supplied retail electric services to approximately 416,000 customers; and retail natural gas services to approximately 381,000 customers. The company also operates five hydroelectric generation facilities with capacity of 102.7 MW; and four diesel generating facilities with a capacity of 107.5 MW. It also engages in venture fund investments, real estate investments, and other investments. Avista Corporation was incorporated in 1889 and is headquartered in Spokane, Washington.